The residential market slowdown is here, and the signs are everywhere.
Nowhere is this more evident than in the hottest markets in the country. We’re seeing the slowdown at the top end of the market, where the days on market have grown significantly, and price concessions are the new normal.
What a difference a few months and a slightly higher interest rate can make.
So many investors I know have focused on flipping houses.
Let’s look at what the data is showing. When you look at the market averages, you can’t see a problem. There has been a slowdown compared with earlier in the year, but average prices are continuing to increase, and days on market are still respectable. Nothing to worry about right?
Remember, real estate is hyper local. That means location, and market segment. For example, starter homes focused on first time buyers will have a different market dynamic compared with luxury homes, even in the same area. It’s dangerous to look at the market averages. But if you look closely, the signs are there.
One leading indicator of the slowdown is the market inventory. In San Francisco, inventory is up 42% compared with a year earlier. Seattle inventory Is up 37%. Denver is up 35%.
In Nashville, the median sales price has dropped 6% since the peak in July of this year. Inventory has grown by 32% in that time.